BELFAST diagnostics company Diaceutics has lamented the unprecedented impact Covid has had on all aspects of the healthcare business and says it expects a “substantial reduction” going forward.
And it prompted the firm to adjust plans for the second half of its trading year to address decisions relating to deferred budgets on a number of its client brands and ongoing delays with access to laboratories.
The comments came from its chief executive Peter Keeling in a statement coinciding with the release of its interim results for the six months to June 30 and changes in its outlook for the second half.
During the half year the former Queen's University spin-out increase revenue by 21 per cent to £5.3 million while its adjusted EBITDA was £0.3m.
But it more than doubled its closing cash position from £14m to £29.8m, which includes funds from the £20.5m share placing it completed in June in order to strengthen its balance sheet in readiness for new growth opportunities.
During the period Diaceutics' client base expanded to 29 clients across 28 global markets.
This came in a period in which it unveiled DXRX, the world’s first diagnostic network for precision medicine, which will enable it to scale its business to meet fast growing demand in that particular area.
The company also won its first contract in July for a fully outsourced diagnostic commercial solution, confirmed with a leading pharmaceutical company.
But looking ahead, in the third quarter from mid-August, a lower than expected conversion of proposals, due to some deferrals of spend on client brands and delays of certain new product launches due to Covid-19, mean the directors expect a substantial reduction in sales in the second half of the year.
“We have taken immediate steps to reduce costs in the remainder of the year by £0.6m, but the current level of activity is likely to result in losses for the full year of less than £1m,” the company said in a statement to the stock market.
“We have started planning for repositioning of resources to support the planned launch of DXRX and servicing the ongoing level of customer demand, which is expected to result in exceptional costs in the second half.”
Mr Keeling added: “In the first half we have grown our client base, revenue and global reach and, at the same time, initiated innovation via our investments in data analytics and the introduction of our proprietary diagnostic network for precision medicine.
“But all aspects of the healthcare business have been impacted in unprecedented ways by Covid-19 and we first saw this in our EU and Asian implementation projects.
“We have had to adjust plans for the second half to address very recent decisions relating to deferred budgets on a number of our client brands and ongoing delays with access to laboratories. The fundamentals of the precision marketplace and its dependency on better testing remain strong.”
